Market outlook

Opportunities for CHP based on fuel cells

There is a huge drive to reduce energy demand in de built environment. For newly built houses there is a multitude of different energy saving concepts. But for existing dwellings it is very difficult to save energy on a large scale. Demand reduction through improved isolation and renewable energy with solar panels are the major options. And there is great demand for efficient heating solutions, such as fuel cells, that can make use of the existing network for gas and electricity. The replacement of old boilers could be a key driver for this technology. The large number of boiler replacements in the EU creates an excellent opportunity for fuel cells to scale up production and to increase stack volume production.

Meeting market demand

Fuel cells provide breakthrough CHP technology, however, taking the next step is challenging. Fuel cell manufacturers have to build up confidence with existing clients while further improving their concept and reducing retail prices. Manufacturers also have to build production facilities to produce first series. Market niches may function as a breeding ground for further development because retail prices are usually higher. This makes the route to a mass market more easily accessible.

From a market perspective the challenge is to persuade as many suppliers as possible to provide a solid product at a reasonable price. And independent information is needed to convince customers that they are buying a fuel cell that has excellent track records and a competitive price.

Learning curve

Fuel cell micro-CHP’s have past the steepest part of the learning curve. Earlier studies indicate that the learning will problably be 12%, so with each doubling of the numbers sold the price will go down with 12% on average. This is similar to for example solar PV. Further cost price reduction needs to be realised by increasing sales volumes and scaling up production. The coming years will prove to be the most challenging to bring costs further down.